- A small group of hedge funds are enjoying some of the best deals in a few years, thanks to the big fluctuations in shipping charter prices.
- Dry bulk shipping prices have skyrocketed to their highest levels since the 2008 financial crisis, but container prices have skyrocketed.
- Strong demand for goods and delays at ports due to coronavirus, such as border restrictions and a shortage of crew and pilots to guide ships, and Blockage of the Suez Canal March.
A small group of hedge funds are enjoying some of the best deals in a few years…, says an article published on financial times website.
Dry bulk shipping prices have skyrocketed
A small group of hedge funds are enjoying some of the best deals in a few years, thanks to the big fluctuations in shipping charter prices recently fueled by the clash between the Omicron coronavirus variant and the awakened global economy. increase.
Dry bulk shipping prices have skyrocketed to their highest levels since the 2008 financial crisis, but container prices have skyrocketed, supported by a recovery in global demand and port congestion.
For consumers, it leads to higher inflation. But for some specialist hedge fund traders, it offers a sort of big price volatility they love.
A high but volatile market next year
Demetris Polemis, principal of Guernsey-based hedge fund Paralos Asset Management, said this year’s price increases and fluctuations in dry bulk rates “leaded to some of the best trading opportunities we’ve seen since launching Paralos in 2011”.
The fund, which manages approximately $ 450 million in assets and trades futures on the indices that make up the Baltic Dry Index, rose 110% until the end of November this year. This is the year of the highest returns since launch.
The emergence of Omicron variants and the high energy and commodity price limits “indicate a high but volatile market next year,” he added.
Hedge funds enjoying some of the best deals
Pilgrim Global, an investment group run by former Fidelity Portfolio Manager Darren Mopin, has seen an increase of about 117% this year, according to figures sent to investors, and about three-quarters of this year’s profits come from shipping.
Funds that use algorithms to understand data patterns are also profitable. This includes AHL, a computer-driven unit of the $ 139.5 billion hedge fund company Man Group. The company’s evolution fund, which trades in a variety of markets, is making a profit of 16.9% this year.
Florin Court Capital, a London-based Quants Group, has risen almost 30%, supported by tank truck positions. London-based Quants Group Aspect Capital will also begin trading Baltic Dry Index futures next year.
Hedge funds have increased by an average of 8.7% in the first 11 months of this year, according to HFR.
Container & dry bulk rates exploded this year, bringing rewards to the fund
Given the low returns and repeated boom and bust cycles, shipping has not been favored by many investors for years.
It’s also a niche sector in the world of hedge funds accustomed to trading tricky markets, but in recent years some computer-driven funds have become more popular as they are looking for new untapped markets to bet on.
To gain exposure to this sector, some funds trade shipping stocks that operate oil tankers or dry bulk carriers. Others are betting on the movement of various Baltic Exchange futures contracts and contracts on certain routes, but it is still voice-mediated.
Recent CME announcement A list of six container freight futures contracts on different routes, which Florin Court said it plans to trade.
After trading within the last decade, container and dry bulk rates have exploded this year, bringing rewards to the fund. The Baltic Dry Index, which measures rates for transporting commodities such as iron ore and coal by various transport routes, has risen 75% this year.
Strong demand for goods and delays at ports due to coronavirus, such as border restrictions and a shortage of crew and pilots to guide ships, and Blockage of the Suez Canal March.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: financial times
